By Sir Ronald Sanders

	The new OECS flag was raised at a special 25th anniversary event in St Kitts.

The OECS is a grouping of some of the smallest States in the world. Its seven full members: Antigua and Barbuda, Dominica, Grenada, Montseratt, St Kitts-Nevis, St Lucia, and St Vincent and the Grenadines.

Two associate members are: Anguilla and the British Virgin Islands. Their combined population is less than 500,000 people.

In the late 1970’s, Britain was anxious to shed responsibility for these remnants of empire by offering them independence.

It became clear to some of their leaders that their small size and lack of capacity required them to establish machinery to pool their individual sovereignty for their collective benefit.

Thus, they set about forming the OECS.

Interdependence

It would be a grouping of independent countries within a framework of interdependence.

After two years of study, the Organisation was formed with the objectives of achieving “the fullest harmonisation of foreign policy” and “to promote economic integration through the provisions of the ECCM”.

The record on both these objectives reflects the difficulties that the OECS faced over its twenty-five year history.

This included “ideological pluralism” in the early 1980’s when governments in Grenada and St Lucia flirted with the notion of closer links to the Soviet Union, and foreign policy harmonisation became virtually impossible.

Grenada invasion

	A joint Eastern Caribbean foreign policy was impossible in the 1980's.

But, essentially, the lack of progress on achieving the full potential of the Organisation over the span of 25 years rested in the reality that there is no machinery to enforce the decisions that are made even by its highest authority.

Up to today, in the area of foreign policy, there are some countries of the OECS that are firmly tied to the Peoples Republic of China and others that recognise Taiwan.

This has implications not only for developing a common policy toward China, the fastest growing economy in the world, but also to issues at the United Nations and at the World Trade Organisation.

The need to overcome the difficulties of making and implementing decisions in the joint interest of all the member countries prompted an effort in the late 1980’s for a political union of the OECS.

But, that was not to be.

The effort foundered for a lack of support even within the countries whose governments had promoted the idea.

Political union

There was an effort to educate the people of the region about the benefits of a political union, but it was insufficient to overcome party-political opposition and the fear amongst large sections of the population in each country that they would lose their privileged positions to migrants from other member States of the OECS.

The OECS has enjoyed far greater success in its ancillary institutions principally its Currency Union and its Central Bank.

Its single currency – the Eastern Caribbean dollar – is among the strongest in the Caribbean. Pegged at a fixed rate to the US dollar (ECS$2.70 to US$1.00) and moveable within the Eastern Caribbean Currency area, conducting business among the OECS countries is greatly enhanced.

The prudential practices of the Eastern Caribbean Central Bank (ECCB) and its insistence on the retention by member states of adequate levels of reserves to pay for imports over a defined period has contributed significantly to the strength of the EC dollar, and this has redounded to the benefit of the individual economies of the member states.

Were it not for their participation in a common currency, some Eastern Caribbean countries would have been in even worse economic difficulties after experiencing catastrophes.

Common currency

Dominica, for instance, would have fared worse after it lost significant share of the banana market in the European Union, and Grenada could have become a basket case after the devastation of Hurricane Ivan.

	The OECS has provided back-up during key times such as the challenge to banana exports to Europe.

As the OECS celebrates its 25th anniversary, it seems that the way is clear for its full member states to join the Caribbean Single Market (CSM) at the end of June 2006.

OECS within Caricom

In January this year, when Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad & Tobago and Surinam brought the CSM into effect, the member States of the OECS conditioned their joining on the creation and capitalization of a Regional Development Fund (RDF).

A formula for capitalizing the RDF has now been agreed among Caribbean Community (CARICOM) States, and it should begin its life with at least US$120 million dollars, once a task force of officials iron-out technical details in time for a CARICOM Heads of Government Conference from 3rd to 6th July.

Trinidad and Tobago will pay the lion’s share of the RDF’s capital, and Barbados Prime Minister, Owen Arthur, will lead a CARICOM team tasked with seeking assistance from external sources to swell the coffers of the RDF.

As an enabling framework for its member States to cooperate and to manage and strengthen their currency through the ECCB, the OECS has been an excellent vehicle.

If its machinery can now be advanced to establish a single voice for its members States in CARICOM and the Single Market, it can give itself greater bargaining power in the Councils of CARICOM, and, in turn, render CARICOM stronger in the international community.

Sir Ronald Sanders is a business executive and former Caribbean diplomat who publishes widely on small states in the global community. Responses to: ronaldsanders29@hotmail.com